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Efficiencies VS Cost Savings: Why Choosing Lower Quotes Can Ultimately Cost You Big

The term, “you get what you pay for '' fits into the logistics industry just like any other industry. There are low cost providers who’s top priority is getting the business and the transaction, but when the time comes to speak with them on the phone or when you’re looking for help, it becomes a major challenge. Likewise, there are customers who are price driven and are only concerned about getting the cheapest rate to move the product and not so much concerned about the service, so there’s a need for that type of transaction service. In those two scenarios, these are generally larger companies with many moving parts and budgets that literally pinch pennies.

In general, small businesses, especially small businesses, tend to take pride in their product and care about the end customer, therefore they require a higher level of service, so “you get what you pay for” becomes a top priority for the way they run their business. It’s when those small businesses try to take on the cheap mentality of the larger businesses because they think they are saving a buck, and things actually become costly for them. Most companies don’t have the inventory in stock, especially in this economic market, to replenish a shipment that has been damaged in transit, lost or even worse, involved in an accident due to a negligent hiring of a company. And small businesses surely don’t have the deep pockets and a team of lawyers that are at disposal to fight these issues and incidents.

Businesses should be concerned about who they are doing business with as a whole. If you knew going into a relationship that a partner was going to cost you money, would you enter into that relationship? In transportation, the trucking company is almost an afterthought. Businesses think they just need a driver to pick up and deliver the freight when expected instead of focusing on issues that could transpire. But rarely do shippers do their due diligence when hiring a trucking company, leaving them exposed to poor service and potential lawsuits if that truck gets in an accident or is found to have a history of poor performance and equipment maintenance, to name a few of the issues.

A good broker may not shield a customer 100% from this, but they will mitigate the risks by a great deal, if they are doing their job. The broker not only is incentivized to protect their company, but to also build a long standing relationship with a customer by making sure their shipments move as efficiently as possible. That comes with vetting the proper carriers before they even touch the dock of a customer. By the broker doing their due diligence on the carriers that haul the customers freight, the customer benefits by that added scrutiny the broker is placing on the carrier, resulting in less exposure to liability issues and increased efficiency as their product moves through the supply chain. It should not always be about the cheapest cost.

If you find yourself being promised cheap rates to undercut the competition by hundreds of dollars, one must consider if the customer's interests are being considered or if that small savings will turn into tens of thousands of dollars in liability.

If you want to work with a partner who has your best interests in mind, provides competitive rates and high-level customer service, our team at No Limit Logistics would love to connect.

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